One More Step Toward The End of Corporate Motorsports: Michelin to Quit F-1

But First Snide's Remarks: Over the past few years I have believed that the days of major corporate support of motor sport sponsorship and involvement are numbered. Many of my fellow journalists and auto industry observers thought I was once again off target in my view of the future...but guess what...I’m not nuts.

This decision by Michelin is just one more example of what I will call “the return of motor sports too its greasy nails roots”. As the inordinate and undeserved monetary support of car racing by unprofitable and desperate corporations that are downsizing and laying off workers ends.

There have been stories and whispers for the past year or so about a pullout from NASCAR by Ford and General Motors...I have asked how can a company that is big time unprofitable and struggling for its very existence justify outlays of hundreds of million of dollars in order to stroke ego’s and have fun.

The days of using motor sport to proof and test new technologies is unfortunately long past. The growth of motor sport investment by car companies exploded as ROI benefits and marketing excitement of the demonstration of new automotive methods and products on the track, has given way to “racing for racing’s sake”.

The original opportunity for the car company sponsors was to have a venue for them to offer proof positive that a new product or technology that proves itself on the track can become a welcome addition to their new car offerings in the future.

But that has all changed; today’s “stock” cars have as much to do with a car I can buy in the showroom as a kite to an F16. And despite the growth of the NASCAR TV audience its sponsorships are an unjustifiable media buy.

Racing fans may be rooting for their favorite drivers but are not rooting for the brands supporting the circuit... the proof: as NASCAR’s ratings have grown and their sponsorship costs skyrocketed, the new car sales of the main supporting brands, Chevrolet and Ford have plummeted...so much for advertising benefits from motor sport sponsorships.

The mainstays of circuit sponsorships are already pulling back. Some examples of this erosion of support is the fact that GM has already pulled the NASCAR plug on Pontiac in spite of TV ratings, and the Chevrolet plug on Indy Racing and just today Mitsubishi pulled the plug on FIA and Michelin on F-1.

I believe that the days of the DNA-Like involvement between the sponsors and the circuits will become just a memory.

Unlike today’s unsuccessful auto company leaders, the next generation of potential big-buck motor sport sponsor’s corporate leaders must make sure that their lean and mean company’s make fiscal decisions based on ROI and facts, not emotion and personal benefit. Investing a stockholder’s assets in a hobby that does not return on the investment is criminal and they will know it.

I believe that today’s lack of grass roots creative tinkering with cars has been fostered by the massive percentage of “motor sport” budget that is expended on mass media and big time fees by the major circuits. Motor sport budgets that at one time funneled down to the local race track have been diverted to today’s ineffective showy sponsorships, and with the seed money for change goes the opportunities for creative gear-heads to invent and improve and to make it go faster and safer.

I believe that the death of “Big Time “sponsorships will actually improve the breed the old fashioned way...through creativity and trial and error on the local level.

So what can the motor sport circuit’s do to maintain a position and importance...its been said before but I will say it again...let them go back to their roots...take a new technology, mold it, apply it and make it work better...so when NASCAR and the IRL and F-1 and ARCA, NHRA and FIA, make their events races between Alternative Powered Vehicles there will once again a reason for the car companies to invest in a hobby, it will pay dividends.

The ubiquity of broadband connectivity will also make for big changes in the Motor sport scene but that story is for another day...let me know what you think; msnide@theautochannel.com

Michelin Report:

Michelin has on several occasions expressed the conditions of its involvement in Formula One: Michelin considers Formula One to be a highly technical motorsport in which the tyre is a very influential component in the scope of the performance of the vehicle.

The teams' freedom to choose their own tyres is essential. Therefore, competition between at least two tyre manufacturers is critical; this provides the basis for real competition between tyre suppliers which, in turn, stimulates progress for the public’s greater interest.

Today, it would appear as though Formula One rules will be modified to impose a single tyre supplier. After consulting with its loyal partners (McLaren Mercedes, BMW Sauber F1, Renault F1, Honda Racing F1) as well as with Sir Frank Williams, Michelin is now convinced that the evolution towards a single tyre supplier is inevitable.

Michelin expresses its regret to see F1 lose a part of its high technology. In addition to this new direction in F1, there are constant changes to racing regulations without warning. Such practices also make planning for the future completely impossible. In this context, continuing to make long-term investments in Formula One no longer presents the same interest.

Michelin has therefore decided not to extend its Formula One involvement beyond the 2006 season. "This decision is the result of profound differences between Michelin’s long-standing sporting philosophy and the way Formula One is managed by the regulating authorities, which no longer provide a clear and sustainable environment to justify long-term investments,” commented Mr. Edouard Michelin.

"For Michelin, leaving Formula One in no way represents abandoning motorsports, to which the Michelin brand has been committed for 117 years.

If F1’s ways of functioning were to be significantly modified, Michelin would not hesitate in proposing its services to the different teams once again." Michelin’s withdrawal at the end of 2006 will almost certainly bring into play a single tyre supplier in 2007.

In this new situation, it should be possible to verify if the FIA’s vaunted advantages of control tyres are proven and, in particular, if equality amongst teams really is guaranteed.

This decision is being made public in December 2005 to respect the FIA’s required notice period and to provide a maximum amount of preparation time to Michelin partners, with whom there was no firm commitment beyond 2006. In conclusion, Mr. Edouard Michelin stated: "No matter what, Michelin will do everything possible to ensure that its partners receive the best service and the best tyres to help them win during the 2006 season, as has always been the case since our return to Formula One in 2001.

Michelin would have liked to have extended its long-term Formula One involvement, because the demands of Formula One as well as the collaboration with partner teams have been such a source of progress and fruitful exchanges. Thank you to all of our partners for this.”